crypto regulation: The pressing questions about crypto regulation that India needs to answer

Canada has levied tax on cryptocurrency transactions since 2013 and continues to do so. According to the FBI, the increase in crypto crime was as high as around 80% from 2020 to 2021. With increase in criminal activities, both globally and domestically, there is a call for more cryptocurrency regulations.

Although there is currently a lack of clarity over the tax status of cryptocurrencies, finance minister Bhagwat Karad indicated in February 2022 that cryptocurrency transactions could face a 30 percent tax. While a timeline is still undefined, China’s central bank has been working on introducing an official digital currency for years and, in September 2021, announced that it had completed pilot tests of its e-CNY digital currency in several cities. The e-CNY token has been developed to replace cash and coins and will be accepted as payment for goods, bills, transport fares, and tolls. After an amendment to the PCMLTFA in 2019, exchanges in Canada are essentially regulated in the same way as money services businesses and are subject to the same due diligence and reporting obligations.

Major tech giants like IBM and Microsoft, alongside Skylark, KPMG, and ten commercial banks, came together to engage in this initiative. Jury selection gets under way Tuesday morning in the criminal case against Bankman-Fried, 31, who is on trial for a series of actions that allegedly led to the abrupt meltdown of the FTX crypto exchange last year. The U.S., meanwhile, has a patchwork of regulations at the federal and state levels. Regulatory agencies like the SEC and the Commodities Futures Trading Commission oversee the different types of investing products. Coinbase
COIN
CEO Brian Armstrong brought this debate to the fore this year, saying that if the U.S. cannot get regulation right, primarily in defining how exchanges should operate, Coinbase will have to invest more elsewhere. With evolving and emerging technologies come new risks, regulations, and responsibilities.

This means that a creditor may take away the physical device, where the debtor’s wallet or private key is stored but it does not enable the creditor to use the data, which are CCs in this case. The new cryptocurrency only comes into the market when miners receive rewards in the form of cryptocurrency to perform their duties. The miner has a complete crypto transaction to solve complicated mathematical problems for authentication. The lack of authority or control in circulation is the main reason why governments want to ban cryptocurrency.

The Reserve Bank of India (RBI) seems to be the most logical option but has expressed intentions of introducing its own crypto. It won’t be surprising if the government comes up with a new body altogether for regulating crypto. For example, while the Internal Revenue Service (IRS) of the US does not recognise crypto as legal tender, it does define it as “a digital representation of value that functions as a medium of exchange, a unit of account, and/or a store of value.” Russia passed the Digital Financial Assets and Digital Currencies Law to regulate cryptos in July 2020, which did not totally ban their use but disallowed it for exchange of goods and services.

• If sanctioned by the Gibraltar Financial Services Commission, the move would pave the way for a fully-regulated exchange dealing in both fiat and digital currencies.
• The government has regulated cryptocurrency through the IT act instead of banning it because of the loss of the many investment opportunities in India.
• The crypto landscape is constantly evolving and keeping up to date with the rules in different global territories isn’t easy.
• In 2018, authorities issued advice on the tax treatment of cryptocurrencies which, in a business context, depends on the type of transaction involved.
• Secondly, it has the ability to be possessed and directed by the owner, the same feature is found in CCs, where the owner can store (possess) Bitcoins in his digital wallet and decide how and when to alienate it.

Similarly, in August 2020, Australian regulators forced many exchanges to delist privacy coins, a specific type of anonymous cryptocurrency. While regulations are constantly evolving, there are no signs of significant additional legislation on the horizon. We suspect both the Canadian government and crypto exchanges will need time to evaluate how the most recent changes have affected the crypto landscape before considering additional legislation. As cryptocurrency usage increases, so too do cryptocurrency regulations around the world that are put in place to govern them. The crypto landscape is constantly evolving and keeping up to date with the rules in different global territories isn’t easy. The cryptocurrency ban by RBI that came in 2018 remains a controversial issue for crypto stakeholders of the country.

However, he also expressed the government’s interest in exploring the potential of blockchain technology. Federal Reserve, Bank of England and even the European Central Bank are moving towards the so-called central bank digital currencies (CBDCs). On the other hand, China has already claimed success of its first pilot project of digital yuan currency. Last year, Forbes published its list of top 10 cryptocurrency exchanges out of the roughly 600 worldwide.

Virtual currency exchanges such as Binance and Coinbase maintain Michigan money transmission licenses. Digital currency businesses such as Binance and Coinbase currently maintain Maryland money transmitter licenses. The Division of Financial Institutions regularly issues “non-binding statements” to virtual currency businesses ruling on whether the businesses must be licensed. The Department of Finance regularly issues no-action letters to businesses such as digital currency ATMs freeing them from licensing requirements. Redacted no-action letters can be found on the Department of Finance’s web site.

A lot of money was used to combat this credit crunch, which meant that the government was printing money to stabilize the economy. Thereafter, he introduced Bitcoins, the world’s first Cryptocurrency, initially the price of Bitcoins was low but in 2011 it levelled with US Dollar on a leading exchange, in the very year the total worth of Bitcoins exceeded 1 Billion USD. As of 2018, the price of 1 Bitcoin is somewhat around 6000 USD.[4]  The price blew off the roof and attracted a lot of attention from investors, consumers to academicians and law enforcement. A prominent example in India, the cryptocurrency market is flourishing on the threat of banning and the uncertain regulatory environment. The Central Board of Direct Taxes (CBDT) presented a proposal to the Department of Economic Affairs, advocating for the regulation of cryptocurrencies.

Now, Bitcoins does not fall under any of the above categories, which makes it difficult to deal with CC during civil disputes. The German Copyright Act protects works which represent personal intellectual creation through Section 2 (2) and contains special rules for the protection of software under Section 69c of the Act. But, Bitcoins does not exhibit any of the above characteristics because it is not a personal intellectual what is crypto payment creation (it is a result of the software process) nor is it software. Hence, it cannot be categorized within the existing set of options available under IPR, which causes the dilemma of classifying Bitcoins appropriately in the German legal system. It is a contract written in a code, which is then uploaded to the blockchain. Only when specific conditions are fulfilled, the program executes the term of the contract.

In 1996, Douglas Jackson launched e-gold, that Wired described in 2009 as “a private, international currency that would circulate independently of government controls”. It did not last long as organized criminals saw an opportunity to exploit the system and ultimately the company was raided and charged by the FBI. In 1998, a computer science graduate Wei Dai developed laid the basis for Cryptocurrency by working on b-money, which would empower online economies to work without tax or threat.

Presently, the Indian Government is working on establishing guidelines for cryptocurrency regulation and to regulate several crypto exchanges like WazirX which have come up in the country. The Government is working towards making transactions safer for the end user and to prevent the possibility of money laundering and illegal financing. Many Latin American countries have expressed concern about the effect of cryptocurrencies on financial stability – and about their money laundering risks. Beyond issuing official warnings, however, most financial authorities across the region have yet to reveal plans for any significant future cryptocurrency regulations. This collective stance has led to friction with the region’s traditional banking industry and in Chile, for example, some banks took steps to close accounts held by cryptocurrency exchanges in late 2018.

Asia is a mixed bag, with some countries welcoming
cryptocurrencies and others imposing bans and restrictions. This article will
provide an overview of current global regulatory developments in the
cryptocurrency industry, as well as their implications. Gina Jurva, Esq., is Manager of the Corporates and Government enterprise content platform for Thomson Reuters. Gina works on solutions to some of the world’s most pressing fraud issues including anti-money laundering (AML), e-commerce fraud, and healthcare fraud, in addition to risk and regulatory compliance. In a previous role at Thomson Reuters, Gina worked as a Senior Legal Writer and Editor. Additionally, she spent a combined 11 years as a deputy district attorney handling both misdemeanor and felony cases and later, her own legal practice defending clients in criminal matters.